It's very strange and there was in the past some garbled youtube language about why you can't. I read it and still didn't understand what it was trying to convey.

While you can't make playlists personally, "kid playlists" do show up when you search and my experiences have been disturbing whenever i try any.

The playlist starts with a video or two that you were probably searching for originally. You step away to unload the dishwasher or take care of the laundry while the little one continues to watch. Then all of a sudden an acid-trip, parody version of one of the previous videos kicks in with jarring effects, questionable and suggestive content and lyrics. But it never quite crosses a line that would get it kicked off of youtube. Viewed alone it might come off as funny to an adult or even teenager.

How and why were the users of these playlists able to add/mix kids content with this other garbage and yet I can't make a private playlist with personally curated content?

I will never allow my kid to watch youtube unless i'm picking personally previewed content.

Edit: just to be clear these "kids playlists" do not contain content uploaded by the same user that created the playlist.

Edit2: I am (we are) also premium users.